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6 Surprising Employment Law Decisions From 2016

2016 was an unpredictable year, which saw the election of Donald Trump, the Brexit vote and the untimely death of numerous iconic celebrities.

We live in an unpredictable world. Employment lawyers were also surprised by some unexpected decisions coming out of our “independent industrial umpire”, the Fair Work Commission (“FWC”), which have significant implications for employers. Here is my pick (in no particular order) of the top 6 surprising employment law decisions from the past year, indicating the uncertainty and unpredictability of our workplace relations system.

Trumped up truckie gets a second chance

Donald Trump was not the only person to have got away with crude comments in 2016 and come out of it a winner. In Mt Arthur Coal Pty Ltd v Jodie Goodall [2016] FWCFB 5492, a truck driver was dismissed for inappropriate use of a two-way radio “chat channel”, when he chatted with other employees in the early morning of his shift for a number of hours. The content of the radio discussions, which were in breach of the company Code of Conduct, included remarks from the employee such as “[Muslims] had 1400 years of bloody inbreeding so they gotta be f**ked up”; and in relation to a colleague: “he’d probably like a good teabagging” and reference to “that book on 50 ways to eat c**k”. The remarks were able to be heard via the two-way radio by up to 100 employees.

At first instance, the FWC found there was a valid reason for dismissal, but that the dismissal was “harsh” because the offensive comments were only an expression of the employee’s “personal views”, were the “mid-range” of seriousness and did not cause actual harm to anyone. The employee was reinstated. Surprisingly, the decision was upheld by the Full Bench on appeal.

Commissioner Johns refreshingly dissented from the majority of the Full Bench, finding that the decision failed to take into account the adverse impact of discrimination in the workplace, posed by the employee’s “crude, lewd and sexist” comments. Commissioner Johns said: “Mt Arthur took decisive action to eliminate Islamophobia and homophobia in its workplace. It should have been commended for its action, not punished by being required to take Mr Goodall back”.

Employer shafted due to “no porn” policy

In Croft v Smarter Insurance Brokers Pty Ltd [2016] FWC 6859, a manager at an insurance company was held to be unfairly dismissed and compensated $10,000 after being dismissed for poor performance and for later admitting to downloading “hard-core pornography” repeatedly on his desktop computer, work mobile and laptop. His laptop contained various explicit images including a video of himself performing sex acts. The Commission found the dismissal was unfair, in part because while the downloading of pornography would otherwise provide a valid reason for dismissal, the employer had no explicit policy proving that its work equipment must be confined to work related activities only. In other words, the employer hadn’t said don’t use the work computers to download and store hard core porn.

Needless to say, this decision has gone viral. But seriously, in this day and age, should employers really have to tell employees that downloading hard-core porn at work is wrong in order to justify a dismissal?

Casual service recognised for calculating redundancy pay

In AMWU v Donau Pty Ltd [2016] FWCFB 3075, the Full Bench of the FWC found that for the purposes of calculating redundancy payments, a permanent employee’s initial period of regular and systematic casual employment will count towards their period of continuous service. The decision is at odds with the longstanding belief that redundancy pay is not affected by an initial period of casual employment. Employers who, for reason of redundancy, terminate an employee who was once casual but transferred to permanent employment, will now be forced to include the period of casual employment in their calculations of redundancy pay.

Better off test – forget the “overall” bit

In Hart v Coles Supermarkets [2016] FWCFB 2887, the Full Bench of the FWC took a new approach to interpreting the statutory “better off overall test”, used to assess whether an enterprise agreement can be approved. In this case, Coles supermarkets originally had its new enterprise agreement, covering 77,000 retail employees, approved by the FWC. However, the SDA union was able to find someone (a trolley collector who played no part in the bargaining for the agreement) to appeal the decision, alleging it did not pass the better off overall test.

Ignoring the terms of the agreement that were more favourable than the award (including higher hourly rates), the Full Bench applied a “line by line” assessment against the terms of the General Retail Industry Award, finding that each and every employee was not better off under the agreement when compared to the retail award conditions. The decision departs from the previously commonly accepted approach that a global assessment of terms and conditions must be undertaken.

The effect of the decision would appear to be that enterprise agreements will only be approved by the Commission if every term in the agreement is more favourable than every term in the corresponding modern award. What then, is the benefit of an enterprise agreement other than protection against industrial action?

Better late than never?

The Fair Work Act requires that employers bargaining for an enterprise agreement provide employees with a Notice of Employee Representational Rights as soon as practicable, and no later than 14 days after the ‘notification time’ for the agreement. In Uniline Australia Limited [2016] FWCFB 4969, the FWC Full Bench found that the late issuing of the Notice by the employer outside the 14 day period rendered the enterprise agreement invalid and incapable of being approved by the FWC, despite bargaining concluding and more than 80 percent of employees voting for the agreement. In this case, the Notice was issued at a later date because earlier discussions did not lead to negotiations, which only commenced almost two years later.

The technical and pedantic approach taken by the FWC is inconsistent with the Fair Work Act objectives for a “simple and flexible framework” for approval of agreements and other Full Bench decisions recommending the approval of agreements occur in a “practical, non-technical manner”.

When they go logo, FWC goes no go

In another decision relating to the issuing of a Notice of Employee Representational Rights prior to bargaining for an enterprise agreement, the FWC held in DP World Melbourne Ltd [2016] FWC 386 that placing the Notice on company letterhead which included a company logo rendered it invalid. This meant the agreement could not be approved. The Commissioner’s rationale was that although the inclusion of a company logo may seem insignificant, it had the effect of altering the Notice from its intended regulatory character to the character of a company produced document. As the Notice departed from the format stipulated in the Fair Work Regulations it was invalid, and regrettably, the entire agreement could not be approved. This decision, like the one above, demonstrates the incredibly narrow approach taken by the Commission when examining mandatory pre-approval steps during bargaining. This approach is overly technical, produces no benefit for any of the parties, and ought to be corrected by legislative amendment to the Fair Work Regulations.

What does it all mean for employers?

These decisions demonstrate that even though the Fair Work Act has been in place with minimal amendment for the past seven years, uncertainty and inconsistency continue to bedevil employers impacted by decisions of the FWC, leading in some areas to an incoherent and confusing body of case law. Two of the cases referred to above illustrative the point. In the Smarter Insurance Brokers case, the employer lost an unfair dismissal case because it did not have a policy prohibiting pornography in the workplace. By contrast, in the Mt Arthur Coal case, the employer had a very prescriptive policy prohibiting racist and sexist comments in the workplace, but the dismissal was still considered unfair despite clear evidence the policy had been breached!

The Liberal government in its workplace reform policy document “The Coalition’s Policy to Improve the Fair Work Laws” (which has mysteriously disappeared from the government’s website), stated in May 2013: “We believe it is crucial that our workplace relations system is supported by an efficient and modern tribunal which promptly provides effective and consistent decision-making. This will include giving active consideration to the creation of an independent appeal jurisdiction”. This has not occurred. Meanwhile, the government remains silent on any major overhaul of workplace relations identified by the Productivity Commission.

While statutory reform stagnates, employers will incur significant costs unfairly in having to appeal FWC decisions at odds with longstanding industrial principles and precedent.

Let us hope that 2017 is a little more predictable, not just on the workplace law front! Somehow, I don’t think it will be….